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I have owned a lot of M cars and have no problem with this. I didn't buy my cars for the badge. I bought them for the upgrades the regular versions can't get (leather upgrade, seats, engine, transmission, exhaust, suspension, brakes...). Many of them I have owned the base version first and the M feels like a different but familiar car, not just an engine upgrade. Granted that gap is closing on some models like M550i and BMW needs to be careful with that.
Everyone has to remember BMW is a corporation and they need to show continuous improvements in sales and profit to shareholders. How do you do that? Large part of marketing. M sells... in fact they really are the last ones to do it. And if that means more cars like the X3M are possible, great. And the haters need to realize cars like the X3M and X5M are a huge part in funding engine development for the M3 and M5.
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